Outsourcing: Jason Beans, Founder and CEO of Rising Medical Solutions (Part 6)

Sramana Mitra: How many physicians do you have in your system right now?

Jason Beans: We have, according to our database, more than 500,000 physician locations. Now that’s inflated in my mind, because if a doctor treats at four different locations, each location will be registered. If she is an individual doctor in our group and also practices as a part of another group, both groups and locations will be registered. We partner with regional and national PPO networks, and, at times, directly contract. So, we probably have 40% to 50% of the facilities and physicians in the country in some sort of network relationship.  It’s a significant portion of the market, a good starting point for what we want to do.

SM: What is happening in the insurance sector, which is your primary client today, in terms of the kind of outsourcing that you are taking care of, like everything that you described about checking what treatment? You have the rules engine to check what treatments should be approved and not approved, and I think you said that larger insurance companies have that in-house.

JB: Some may have it. They may have the primary bill review function in-house, but they will outsource other functions. Every company is different, but I do find more companies are finding what their niches are and then outsourcing everything else. Someone said to me, if you’re hiring a person and he can’t work his way to CEO someday, then outsource it, because you’re not going to get the best people. They don’t have the career path. They don’t have the opportunities. That’s kind of a good way to look at business. You need to focus on what you’re great at. Insurance companies are mathematicians and finance companies. They try to figure out how much something’s going to cost, and they figure out how much they need to charge for it. It’s an analytical and, candidly, a highly regulated business. Anything to do with efficiency or specialized cost savings, they’re not designed to do it properly. So, medical cost containment, automation, off-shore data entry, software to make things more efficient or storing medical records electronically rather than on paper, those all areas where I see them outsourcing all the time.

SM: One of your core competency areas is something that larger insurance companies also outsource. My question, is how big is that piece of the outsourcing market and what percentage of that market do you own, and how much head room is there for you to grow in that space?

JB: I would say that own a very, very small percentage of the large insurance company market. We have develop a reputation with the mid insurance company market. Insurance companies are risk averse. They tend to use the same big-name companies, so it takes a while to develop your reputation. I do think a lot of our products are sellable in the large insurance company market. There’s a very large opportunity there for some niche products. They may not use our entire suite of services. They may use only a small percentage, this product or that product, if that makes sense. The small insurance companies and the mid-size insurance companies may come and say, Jason, build out everything. Just build it out, start to finish, on the back end, because we don’t have anything that compares, or we haven’t built out anything, yet.

SM: Yes. That makes perfect sense. It’s also a strategy that is a tried-and-true strategy when there are big competitors servicing the larger clients in your space, to go for the mid-sized players and offer your service at a different price point and a different delivery model. And you can always build an outsourcing business in that space – actually, all kinds of businesses – not just outsourcing businesses, product businesses as well.

JB: That’s very true. If you go where the largest clients are, everyone’s going there. So, your largest and most sophisticated competitors will already be there. We built our company by going with tiny insurance companies, smaller than we have today. They just wanted good service. We did a great job on savings. We did a great job on service. We were actually behind on technology, but they were okay with that. They were okay as long as we were able to help them out. That was a great way to start. They were wonderful clients.

This segment is part 6 in the series : Outsourcing: Jason Beans, Founder and CEO of Rising Medical Solutions
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